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Economy

Ghana is investors’ haven – Akufo-Addo

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Ghanaian President Akufo-Addo has described his country as “ haven of peace, security and stability’’ that protects legitimate investments.

He assured the business community in China that their preferred investment destination in Africa should be Ghana.

He spoke at the Ghana-China Investment Forum in Shangdong Province, where he urged the Chinese business community to take advantage of the growing business-friendly climate in the country to invest in Ghana.

“Our flagship agricultural programme, `Planting for Food and Jobs’, our renewable energy sector and ICT growth are all areas of considerable opportunity.

“These are all sectors you can profitably partner with Ghanaian companies, some of whose representatives have come all the way from Ghana to be here with me,” he said.

Ghana has taken the decision to “walk hand-in-hand with China and her business community, because of the desire to walk far/

President Akufo-Addo told the gathering that China has, since 2015, been Ghana’s largest trading partner, with total trade amounting to some $6.7 billion in 2017.

However, with the majority of exports from Ghana to Shangdong, for example, being crude oil, bauxite and its concentrates, sawn timber, i.e. raw materials, the President told the Chinese business community that “we want to stop being mere producers and exporters of raw materials, and, thereby, deal with China, and, indeed, Shangdong province, on the basis of things we make.”

It is for this reason that he commended to Chinese business community his government’s flagship policy of “1-District-1-Factory”.

“Thus far, companies that have established factories in Ghana, under this policy, are importing machinery and equipment duty-free, are not paying import duty on raw materials imported for production, and are enjoying a corporate income tax holiday for five years,” the President said.

He indicated that, additionally, the Trade Ministry has attached two technical experts to provide free advisory services to these companies.

Touching on the country’s infrastructural deficit, President Akufo-Addo said his government is embarking on an aggressive public private partnership programme to attract investment in the development of both the country’s road and railway infrastructure.

“We are hopeful that, with solid private sector participation, we can develop a modern railway network with strong production centre linkages and with the potential to connect us to our neighbours to the north, i.e. Burkina Faso, to the west, i.e. Cote d’Ivoire, and to the east, i.e. Togo,” he said.

The President continued, “We believe that this is an area where Chinese technology and expertise would be very welcome, and we are happy to note that some important Chinese companies are, in fact, making efforts to enter the rail sector of our economy.

“We will know the result shortly, but I am confident that there will be Chinese participation in the development of the Ghanaian rail sector.”

He told the business community that there are several projects in roads, water, housing, transport, industry, manufacturing, agriculture, petroleum and gas, the exploitation of Ghana’s mineral wealth of bauxite, iron ore and gold, amongst others, which are being structured to attract private sector financing.

President Akufo-Addo, thus, urged them to invest in Ghana either through the Ghana Investment Promotion Centre or set up as a Free Zones enterprise.

“Regardless of where the investment is, government has instituted a number of incentives for the investor, depending on the nature of the activity, or the location of the investment,” the President added.

These incentives, he said, include exemption from payment of import duty for plant and machinery; 25 per cent tax rebate for companies located in regional capitals; 50 per cent tax rebate for companies investing outside regional capitals in the regions; and 0% corporate tax for ten (10) years, and, thereafter, 8% for companies in the Free Zones enclave.

President Akufo-Addo, in conclusion, stressed to the Chinese business community “in future, when you are deciding to invest in any part of the world, certainly in Africa, Ghana should be your preferred investment destination.

“As I have said, we are keen on establishing a business-friendly economy to attract foreign direct investments to exploit our country’s great potential on mutually satisfactory terms. I can assure you, once again, that your investments will be protected in fact and in law.”

Source: Joyonline

Economy

Leveraging Digitized Social Welfare Programs to Deepen Female Financial Inclusion in Africa

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(Image credit: jumo.world)

Global economies- from Nairobi to Beijing- are undergoing a rapid
transformation, with digital technologies changing the way people
communicate, work, bank, and access information.

Today, previously unbanked households in Nigeria, Kenya and other nations of Africa can now access instant credit over their mobile phones.

Rural households in Senegal are lighting their homes by linking their bank accounts to off-grid solar energy systems. Government officials in India are combining digital payment and ID technologies to deposit money directly into the accounts of citizens living in distant villages, increasing the transparency and efficiency of social welfare programs.

These and other digital innovations are creating opportunities for countries to build more inclusive, productive, and prosperous societies.

The McKinsey Global Institute estimates that widespread adoption and use of digital payments and financial services could increase the GDP of all emerging markets by $3.7 trillion by 2025. This additional GDP could create up to 95 million new jobs, raise overall productivity and investment levels, and make government spending more efficient.

Interestingly, no one stands to benefit more from this growth than women. It is a fact beyond argument that women and girls shoulder the global burden of poverty. Decades of research show that poverty deprives women of vital health, education, and socioeconomic opportunities throughout their lives. As a result, women earn less, own fewer assets, and are underrepresented in economic and political decision-making. This inequality means they experience fewer benefits from economic growth and suffer more of the challenges of life lived in poverty.

Also Read: Ava Airways CEO Olivier Arrindell On Envisioning An Airline Of The Future And Connecting Africa With The Caribbean

For women in low- and middle-income countries, digital savings, credit, and payments services can provide them with a critical link to the formal economy and a gateway to greater economic security and personal empowerment.

An emerging body of evidence shows this also pays dividends for their families in the form of better health and education. When women-headed households in Kenya adopted mobile money accounts, poverty dropped, savings rose, and 185,000 women left agricultural jobs for more reliable, higher paying positions in business or retail.

In Niger, distributing government benefit payments through a mobile
phone instead of cash helped give women who received the transfers
more decision-making power in their households.

Overall, strong progress has been made with financial inclusion in many (African) countries. And many of these countries have also experienced a sharp uptick in financial inclusion rates among women. Between 2011 and 2017, the number of women with their own account doubled in Kenya and Ghana and increased seven-fold in Senegal. And crucially, in several African countries, mobile money has emerged as an equalizing force, and can further help more and more (African) women towards financial inclusion.

However, digital financial exclusion is not merely an access problem. Although digital technologies hold vast potential to improve human welfare, they also pose considerable risks, from the establishment of digital monopolies to cyberattacks to digital fraud.

In light of that, as previously excluded women become first-time users of digital technologies, they are particularly exposed to these and other risks, such as new forms of gender-based violence, abuse, and harassment in digital contexts.

Our global challenge, therefore, is not merely to close the digital (financial) divide, but also to establish sound regulatory and supervisory frameworks to ensure that women and vulnerable citizens reap the benefits from digital technologies without suffering from their potential adverse effects.

Written By: Onyeka Akpaida, Founder at Rendra Foundation

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Economy

Thomas Pays, CEO of Ozow: SA’s economic revival depends on digital inclusion

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Thomas Pays, CEO and co-founder Ozow

Unless we ensure digital inclusion for all South Africans, any efforts to build a vibrant and growing economy will fall flat.

South African consumers and businesses need safe, convenient and accessible cash alternatives that simplify the payments process. As it stands, too many are excluded from online and other value-added services simply because they lack access to a bank card. While there are lower levels of banking services penetration in other African countries, 80% of South African citizens are banked, a commendable increase from only 46% in 2004. However, only one in eight adults have access to a credit card. For the rest, many online services remain inaccessible. The over-reliance on card payments to facilitate online and other transactions continues to exclude a large portion of the country’s consumer market. 

Cash still dominates the South African economy. Even though it is still growing change is sweeping through the ecosystem. Market-led payments companies are introducing new innovations that enable non-card users to transact safely and conveniently, greatly improving digital inclusion especially in underserved markets. Judging by recent developments, government is also searching for solutions that replace cash with more convenient and safer forms of electronic payment, and bring opportunities for underserved communities to access new payment and financial services options.

Digital inclusion a national priority

The South African government has set its sights on fostering greater digital inclusion, as is evident in the President’s State of the Nation address in February, which highlighted the need for improved digital literacy among the country’s citizens. The SA Reserve Bank’s Vision 2025 has also emerged as a roadmap to establishing a vibrant open banking ecosystem in the country.

In a bold step earlier this year, regulators instructed South Africa’s mobile operators to adjust their pricing in order to reduce inequality in digital inclusion. The Competition Commission found that lower-income mobile users were disproportionately disadvantaged by higher per-MB costs than larger data bundles for higher-income users. This will certainly aid greater adoption of online services and alternative payment types among the country’s large middle- to lower-income groups, who were previously unable to afford high ad-hoc data costs.

Solutions to low adoption of new payment types

In a 2019 global report, McKinsey identified cloud-based, API-driven architectures built on open banking principles as accelerators of innovation and competition in the payments industry. And that’s one vital role Thomas Pays believe companies such as Ozow fulfil in the African market: combining new technologies and new thinking to offer simplified payments to all. This is evident in how some of the main barriers – lack of data, low-end smartphones – are being overcome with innovative workarounds.

While South Africa’s smartphone penetration is currently over 80%, a lack of data means many consumers are often locked out of using online services and alternative payment methods such as QR code based payments. One solution is to zero-rate mobile data costs. In our experience, this helps ensure consumers can make electronic, mobile or app-based payments even when they have no data on their devices, and directly contributes to greater adoption and usage.

Also Read: Lindelwe Lesley Ndlovu, African Risk Capacity (ARC) CEO Shares Goals, Disaster Risk Solutions, COVID-19 and Future

Many of the smartphones used by lower-income consumers also lack sufficient space for the growing list of apps used to facilitate electronic payments. Here, offering the option of a progressive web app that can be accessed via a browser allows consumers to pay without having to permanently store a native app.

South Africa – and the rest of Africa – needs to put concerted effort into driving digital inclusion among the continent’s 1.3 billion citizens. I’d suggest starting with improving access to simple, safe payment options that remove the reliance on cash.

By: Thomas Pays, CEO and co-founder Ozow

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Economy

Egypt, PRL sign train engines contracts worth $466.3M

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CAIRO – 16 November 2019: The Egyptian Railway Authority (ERA) signed with PRL (Progress Rail Automotives) a number of contracts worth $466.3 million after a meeting with President Abdel Fatah al-Sisi that took place last week.

The American company will supply 50 train engines over 22 months, carry out long-term maintenance for 41 engines by June 30, and upgrade 50 others within 30 months since the conclusion of the deal. The company will also provide maintenance services and spare parts for those 141 train engines for 15 years. The value of contracts will be secured through soft loans, except for $27 million that will be paid by ERA’s treasury.

In July, ERA endorsed the technical specifications of two passenger railcars to be supplied by Transmashholding in September. Those are part of a contract to supply 1,300 railcars. One of the railcars will be tested in Hungary, so it will be granted the safety certification by the European Railway Agency. The other will be tested in Egypt. Afterwards, the first batch of railcars in the contract will be delivered in accordance with the timeline set by both parties.

The contract states that 650 railcars will be supplied from Hungary, 500 will be delivered by Russia, and 150 will be manufactured by Egypt under the supervision of Transmashholding. An Egyptian locomotive factory will be established as part of a plan to localize the locomotive industry in Egypt and transfer the know-how to workers, technicians, and engineers in the sector. The factory will produce the 150 railcars and also provide maintenance services.

The representatives of ERA and Transmashholding agreed to hold further visits and meetings to study the possibility of cooperation in rail infrastructure, mobile rail, workshops, new lines, and maintenance of existing railcars.

In the same month, an official source told Egypt Today that ERA needs 12 rail test machines to detect and repair defects in railroads revealing that contracts to purchase eight of those are being finalized.

Also Read: Meet Mariatheresa S. Kadushi, Founder of M-afya, A Mobile App Providing Health Information In Native Languages In Africa

ERA will receive four rail test machines worth €8.5 million by the end of 2020 supplied by an Austrian company with which a contract was signed a few months ago. The machines will enable the authority to better diagnose defects in the railroads which would increase the safety, and inhibit derailment accidents.

Egypt Today

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